BUSINESS IN BRIEF 27/10

Efforts made to attract more investment to northern IPs
Removing difficulties for businesses and upgrading the infrastructure system to attract more investment to economic zones (EZs) and industrial parks (IPs) were among the highlights of a recent conference held in the central province of Quang Tri.
Participants at the ninth conference of the Club of Industrial and Economic Zone Management Boards in northern localities also made proposals related to the completion of central and local state agencies in charge of managing such zones.
Statistics show that the country has in total 300 industrial parks (IPs), 18 coastal economic zones (EZ), and 28 border gate EZs, hosting about 5,000 foreign-invested projects totalling more than 110 billion USD and nearly 6,000 domestic projects valued at 970 trillion VND (46 billion USD). Northern provinces and cities from Thua Thien-Hue northward have established more than 100 IPs and seven coastal EZs.
However, they also pointed out that although policies on IPs and EZs are relatively complete, they are not yet in synch, while investment in infrastructure development has been limited. Attendees tabled measures to speed up disbursement of investment in infrastructure systems for IPs and EZs.
Nguyen Duc Cuong, Chairman of the Quang Tri People’s Committee, said over the past years, Quang Tri has paid much attention to the development of IPs and EZs. Currently, the province has one special trade zone and three IPs. The Lao Bao special trade area is a new model where many pilot preferential policies are being applied for the first time in the country, he said.
Quang Tri is focusing on the construction of the Cua Viet-Cua Tung sea tourism site and the Southeast maritime EZ to make use of the East-West Economic Corridor, which is expected to open up new prospects in the local socio-economic development, he noted.
Trade expo links Vietnam, Cambodia military firms
The 2013 Vietnam-Cambodia trade fair will commence on November 14 in Cambodia’s capital city Phnom Penh, said a representative from the Defence Ministry at a press briefing on October 18.
The trade show aims to consolidate the traditional friendship and solidarity between the two armies, as well as support Vietnamese businesses in trade promotion in Cambodia and other ASEAN countries.
According to the organising board, as many as 200 Vietnamese enterprises have registered with more than 300 booths introducing high-quality products.
During the five-day event, art troupes of the two countries’ militaries will entertain fair-goers with nightly musical and dance performances.
In addition, Vietnam ’s Military Hospital 175 in association with Cambodia ’s Royal Army Hospital 179 will operate on 300 cataract patients.
Statistics provided by the Trade Counsellor at the Vietnamese Embassy in Cambodia show that bilateral trade between Vietnam and Cambodia has constantly increased, reaching 3.3 billion USD last year and 2.6 billion USD in the first nine months of this year. The figure for the entire 2013 is estimated at 3.5 billion USD.
An Giang seeks to popularise products
Eleven contracts were signed at a trade conference in Mekong Delta An Giang province on October 17 to distribute its key products to markets in the region and Ho Chi Minh City.
The event created an opportunity for local businesspeople to popularise and promote their key products such as rice, sugar, seafood, fish sauce and frozen fruit and vegetables.
The province has established a policy framework to distribute its commodities to domestic and foreign markets as well as devised policies for local enterprises to get involved in domestic market promotion, said Vice Chairman of the provincial People’s Committee Huynh The Nang.
He stressed that while distributing goods, local businesses must ensure a stable output, quality and convenience.
With geographical advantages, the province boasts great potential in seafood development, exporting its products to 100 countries worldwide.
An Giang has focused on domestic markets by hosting many trade programmes to promote its key products in the capital and the central region.-
Hai Duong, Vientiane boost development cooperation
The northern province of Hai Duong and the Lao province of Vientiane have signed a cooperation agreement and pledged to subsequently share their experiences in socio-economic development.
The deal was reached at a working session between Hai Duong officials and a visiting delegation from Vientiane led by its Vice Governor Bounmy Phouthavong on October 17.
At the session, both sides briefed each other on their socio-economic development, investment attraction and social welfare in the first nine months of this year. They also discussed ways to fulfill their socio-economic development goals in the year’s remaining months.
It was agreed that delegation exchanges will be boosted to increase cooperation in the fields of business, culture and education while a cooperation centre established to promote further sharing.
Both sides will also enhance cooperation and exchanges in tertiary and general education.
The Vietnamese province will continue to promote scholarships to 10 Vientiane students studying at the Hai Duong Medical Technical University whilst the Lao locality will cover financial expenses for Hai Duong students to learn the Lao language.
In addition, Hai Duong will send experts to transfer farming and breeding techniques to the Lao province and organise fact-finding trips to survey the tourism potential.
Central Highlands make industry promotion hay
The total industry promotion funding of the 15 provinces and cities in the Central Highlands in 2013 will reach 38.285 billion VND (1.81 million USD), up 15.96 percent compared with the previous year. Report by the Vietnam Economic News.
Among eight programmes of industry promotion activities in the region, the one on supporting economic cooperation and development of industrial clusters topped the disbursement rate, accounting for 88.65 percent of the year’s plan, followed by the one on improving management capability and starting a business (87.11 percent).
Some other important projects which directly affected the development of rural industrial units were actively implemented by regional industry promotion centres and recorded relatively high disbursement.
According to reports from the Agency for Regional Industry Development (ARID) under the Ministry of Industry and Trade (MOIT), in the first nine months of 2013, 15 cities and provinces in the Central Highlands disbursed 23.343 billion VND, accounting for 60.97 percent of the plan for the whole year.
During the period under review, the regional industry promotion activities have provided vocational training to 3,870 rural workers with disbursement capital of 4.441 billion VND, accounting for 61.87 percent of the yearly plan. Some provinces such as Binh Dinh, Lam Dong, Quang Binh and Thua Thien-Hue had fulfilled 100 percent of vocational training plans.
As for the programme on technical demonstration model and scientific, technology transfers, the regional industry promotion also demonstrated 12 technical models and supported 50 enterprises and production units in applying modern machinery and equipment into production. This programme also disbursed 4.343 billion VND, accounting for 52.82 percent of the plan.
The industry promotion activities in the region also well implemented awareness raising programmes and provided information about industry promotion and industrial development policies, disbursing 1.406 billion VND, accounting for 72.47 percent of the plan.
In addition, the cities and provinces in the Central Highlands paid attention to some other industry promotion subjects such as handicraft development and supported coordination and cooperation in industrial development among different provinces. In the first nine months, the regional localities disbursed 5.73 billion VND for these activities, accounting for 86.63 percent of the year’s plan.
The ARID reported that industry promotion activities in the Central Highlands were conducted very efficiently compared with those in other localities across the country, in terms of disbursement speed, diverse activities and scale, quality of industry promotion projects.
In particular, Lam Dong province offered capital assistance for industry promotion projects, which then encouraged more investment and business expansions of local enterprises and industrial units. This model was also imitated by other localities in the region and has started to spread.
However, localities also reported many difficulties in the disbursement of industry promotion funding, especially state funding. The reasons were due to small and very small scale of rural industrial enterprises with poor disbursement performances amid difficult market developments. Therefore, the local enterprises did not dare to take risks to invest and expand production.
In addition, other obstacles for the development of local industry promotion included low funding for each project, weak capabilities among the industry promotion staff and complicated payment procedures for industry promotion projects.
Despite the issuance of Resolution 45/ND-CP dated May 21, 2013 in the field of industry promotion which offered more preferential treatments for beneficiaries, this resolution has not been applied due to insufficient guidance documents.
Before those limitations, ARID director Do Xuan Ha asked the regional cities and provinces to tighten checks and monitoring programs to timely remove difficulties for the beneficiaries and complete the industry promotion projects on schedule.
He also called for awareness and training programmes relating to Resolution 45/ND-CP to encourage participation of rural industrial units and renovation of administrative procedures to make the local industry promotion more efficient. As for localities with a large number of ethnic minorities such as Dak Lak, Dak Nong and Kon Tum, they need to organise vocational training courses and help them apply new and modern knowledge to the traditional occupations, contributing to ensuring stable incomes and improving their living conditions.
Exports to hit US$ 131 bln in 2013
Viet Nam is striving to fetch US$131 billion from exports in 2013, an increase of 14% against last year and 4% higher than the target set by the National Assembly.
Deputy Minister of Industry and Trade Tran Tuan Anh told representatives of business associations and exporters in the southern region recently that exports remained a silver lining in the country’s economic panorama as its turnover amounted to US$ 96.27 billion in the first nine months of this year, up 15.5% year-on-year, despite narrowed markets, falling prices and production difficulties.
The industrial and processed products made up 70% of the country’s total exports as they earned US$ 67.44 billion a 26.8% rise over the same period last year.
Mobile phones remained the top foreign currency earner, bringing home US$ 15.5 billion, a year-on-year growth of 19.9 %. It was followed by garment, with US$ 13.1 billion; footwear, US$ 6 billion; and wood and wooden products US$ 3.87 billion.
According to the Viet Nam Leather and Footwear Association (Lefaso), the target of an export turnover of US$ 9.5-10 billion this year is within its reach.
Nguyen Van Tuan, Deputy General Secretary of the Viet Nam Textile and Apparel Association (Vitas) forecast US$ 18.5 billion export revenue for the industry in 2013 as orders are large.
However, the export of agro-seafood products faced a lot of difficulties due to the global economic downturn. In the nine-month period, the country’s coffee exports reached only 1 million tons, down 23.4% year-on-year.
Rice, a key export of Viet Nam, also saw decreases of 14.7% in volume and 17.2% in value, said Truong Thanh Phong, President of the Viet Nam Food Association (VFA), adding that the sector has lowered its yearly export target from 7.5 million tons to 7 million tons.
According to the Ministry of Industry and Trade (MoIT), although the world economy has shown signs of recovery, declining demand and increasing protectionism have caused difficulties for Vietnamese exporters in expanding their markets and seeking partners.
Therefore, the MoIT and the Ministry of Planning and Investment have submitted to the Government the scenario for next year’s exports with a turnover of US$ 144 billion, an increase of 10%.
This is a big challenge that requires concerted efforts by all ministries, agencies, associations and businesses, said Anh.
He suggested ministries and agencies focus on solving capital and interest rate issues for producers and exporters while building mechanisms and policies to support agro-seafood consumption.
It is necessary to enhance the control of the quality of exports in order to improve the prestige of Vietnamese products in the world market, he added.
Trade performance in first nine months reviewed
In the first nine months, export turnover advanced by 15.5% against the same period last year, according to the Viet Nam Customs.
In the period, export growth rate was higher than the National Assembly’s preset target of 10%. Accordingly, total export revenue was forecast to hit US$ 130 billion, higher than the set goal of US$ 126.1 billion.
Export growth pace tripled GDP growth rate of 5.14, aiding the performance of nine-month GDP in rising higher than that of last year (5.1%).
In addition, export surged at a faster pace than import and contributed to maintaining a trade surplus in  the January-September period and keeping minute trade gap for the whole year in which import was set to be equivalent to 8% of export or US$ 10 billion.
Export revenue structure has shifted in a positive manner. The proportion of raw materials fell to less than a third of total export. On the other hand, export of refined commodities increased over two thirds in the same period. 
In the first nine months, 18 commodities earned over US$1 billion in export revenue. Telephones and spare parts took the lead with US$15.52 billion; followed by garments and textiles US$13.08; computers and spare parts US$7.7 billion; footwear US$6.01 billion; crude oil US$5.35 billion; aquatic products US$4.68 billion.
Viet Nam also had penetrated into 24 import markets which were sized over US$1 billion such as the US with US$17.14 billion; Japan US$9.87 billion; China US$ 9.5 billion; the RoK US$ 4.78 billion.
Noticeably, Vietnamese shipments to TPP member states valued US$ 37.3 billion. Imports from TPP member states touched US$ 22.2 billion in the first nine months.
Viet Nam run a trade surplus with 48 markets out of 77 countries and territories especially the US with US$13.26 billion; the UAE US$2.89 billion; Cambodia US$ 1.89 billion.
Nevertheless, export followed the declining trend in terms of both growth pace and scale on a monthly basis.
The domestic sector held a small market share with 33.5%, leaving 61% to the FDI sector.
The country was still hit by large trade deficits in big markets including China with US$ 17.25 billion; Taiwan US$ 5.24 billion; Singapore US$ 2.4 billion and Thailand US$ 2.25 billion.
Hanoi fails to deal with abandoned land
Hanoi authorities set a target to settle the issue of many land plots left idle or used for wrong purposes over the past years, but to date they have still failed to control the problem.
In mid-2012, the Hanoi People’s Committee found violations at 32 local land plots in the four districts of Thanh Xuan, Cau Giay, Tay Ho and Tu Liem, covering a total area of 488,545 square metres, used by 23 investors.
Among those, more than 15 plots remain unused with a total area of 309,368 square metres, while 10 others are used illegally as parking lots, restaurants, garages and mini football grounds.
The list of violators includes Vietnam Construction and Import-Export Joint Stock Corporation (Vinaconex), Housing and Urban Development Corporation (HUD); Hanoi Construction and Investment Joint Stock Company No2. (Hacinco) and Song Da Corporation and a number of others.
After a range of delayed projects, the municipal authorities have asked districts to deal with land violations. However, over the past year, many of the plots given for projects remain as they were, covered by wild grass.
Many of the plots in Hanoi are used for restaurants and parking lots.
Along Pham Hung Street in Cau Giay District and Tu Liem District there are dozens of plots listed among those to be revoked.
Many land plots covering thousands of square metres in Tay Ho District were auctioned, but were left idle for many years.
Ba Dinh District has at least nine projects left idle for many years, including a 4,000-square metre one in Ngoc Ha Ward developed by Handico since 2003.
Nguyen Trong Dong, Director of Hanoi Department of Natural Resources and Environment, said, “We have proposed that the city withdraw land from the two delayed real estate projects in Ba Dinh District for school and cultural housing projects.
The project was assigned to the investor in 1999, but, to date, it has been no groundbreaking, he added. Some investors had financial difficulties due to the economic downturn, but many intended to keep land.
The vice chairman of the Hanoi People’s Committee, Vu Hong Khanh said, “Any violator will be strictly punished.” However, in reality, settlement of the issue remains very slow. The number of revoked projects is modest compared to the found violations.
Pham Sy Liem, Vice Chairman of the Vietnam Construction Association, said many enterprises tried to seek authorities’ approval for their projects, but due to their limited capacity, they left projects idle.
“It is due to both the irresponsibility of investors and the lax management of authorities,” Liem noted.
Vietnam still has edge over Myanmar, VinaCapital
Myanmar has emerged as a potential market in Southeast Asia but has yet to have a competitive edge over Vietnam in foreign investment attraction in the short term, said Andy Ho, managing director of VinaCapital.
Ho said on Thursday at a press briefing on a VinaCapital investors conference in response to the Daily’s question about the interest of foreign investors in Myanmar.
VinaCapital will hold a roundtable to discuss investment opportunities in Myanmar for those investors attending the conference. Besides, VinaCapital plans to open an office in Myanmar in the coming time to explore opportunities there.
However, in short term, Myanmar is still unable to compete with Vietnam in attracting foreign investment as its legal framework is not yet complete. Investors, when considering doing business in Myanmar, will care about issues like asset ownership and the stability of Myanmar’s currency.
“Foreign investors have thought about investment there but they have not poured money,” said Ho. Vietnam should worry about regional countries such as the Philippines and Thailand when it comes to attracting foreign investments, he noted.
Another point Vietnam should take into account is that foreign investors will withdraw money and place it in developed countries like the U.S. as prices of assets would turn cheap when the U.S. tapers stimulus. Currently, the U.S. spends US$85 billion a month buying long-term bonds but when the stimulus stops, investors will get back to America as seen through the recent capital outflows from India and Indonesia, according to Ho.
“If so, capital flow into Vietnam would partly decline,” said Ho.
Steve Almond, global chairman of Deloitte, earlier told the Daily that in addition to developing markets, Vietnam would have to compete with developed economies in attracting foreign investments as well.
VinaCapital is still calling for new capital from foreign investors. Around 80 foreign investors putting their money in the funds managed by VinaCapital gathered at the investors conference in Vietnam on Thursday to get a clearer understanding of the investment situation in Vietnam.
This is the eighth such annual conference held by VinaCapital. At the conference, Deputy Prime Minister Hoang Trung Hai fielded some questions of investors concerning the Government’s policies for foreign investments and economic stabilization in the coming time.
Investment funds managed by VinaCapital have paid dividends of around US$150 million to foreign investors in the past 18 months. VinaCapital forecasts VN-Index to stay at over 500 points late this year, according to Ho.
VinaCapital currently runs three closed-end funds trading on the London Stock Exchange, including Vietnam Opportunity Fund (VOF), VinaLand (VNL) and Vietnam Infrastructure Limited (VNI) having total net asset value of US$750 million, US$466 million and US$200 million respectively. Besides, VinaCapital together with Draper Fisher Jurvetson co-manages the technology fund DFJ VinaCapital L.P.
Australian wool makes major gains in Vietnam
Australian and Vietnamese textile companies are hastening a joint project that plans to propel Vietnam into a leading position of global textile manufacturers.
The "Out of Vietnam" project, launched in 2012 by Australia’s Woolmark Company, brought more than 50 manufacturers in Hanoi, Ho Chi Minh City, Hue, and Lam Dong together, said Le Tien Truong, deputy chairman of the Vietnam Textile and Apparel Association (Vitas) and also vice president of the Vietnam National Textile and Garment Group (Vinatex).
“Vitas and Vinatex have pledged their full support for the project,” said Australian Consul General in Ho Chi Minh City John McAnulty who was joined by Australian Wool Innovation Limited’s CEO Stuart McCullough on the sidelines of the Woolmark fashion show last week.
McCullough said AWI, which owns Woolmark, has been working with Vietnamese manufacturers to develop a supply chain in Vietnam and has expanded by introducing Merino wool to the local market.
“AWI has arranged the supply of suitable materials for product development and sent technical specialists to Vietnam to help in training and R&D. It has also introduced local manufacturers to international customers,” he added.
The project is aimed at promoting the Woolmark brand and introducing woolen knitwear products made in Vietnam out of Australian wool, said Woolmark’s general manager for product development and commercialization Jimmy Jackson. He added that their Vietnamese partners have the necessary skills to meet his firm’s strict standards.
Australia is the world’s largest producer of wool, and arguably the world’s finest, said McAnulty. “We have been working with Woolmark over the past couple years on their nationwide project and wool has always been an important export for us. Continued development of Vietnam’s textile industry benefits all,” he added.
The Australian government works with AWI as the company’s mission is to enhance the profitability, international competitiveness, and sustainability of Australia’s wool industry.
SCG steadily develops human resources
Human resources development has been one of leading ASEAN business conglomerate SCG’s key factors to success over the past century.
Under SCG’s business philosophy ‘Believe in the value individual,’ SCG people are a cornerstone of the group’s operations.
“SCG people are those individuals who consistently adhere to SCG’s Four Core Values, who are open minded and ready to face challenges, and who are always keen to learn and develop themselves,” said SCG president and CEO Kan Trakulhoon.
“They will help SCG ride out difficulties and pursue its future of new innovations and ever higher standards of performance for the coming century,” he continued.
SCG people are considered the driving force behind SCG’s rising to a leadership position across numerous fields. They are dedicated, talented and ethical and believe in being innovative and open to new challenges.
The strength and value of SCG people has always been a product of example. Young employees learn from experienced staff and it is the responsibility of senior staff to educate those below them in these values. One generation passes on their experience and knowledge to the next.
The values include fairness, meaning that SCG is committed to fairness between all concerned parties; dedication to excellence, meaning that SCG expects employees to consistently demonstrate excellence; belief in the value of the individual, reflecting SCG’s perspective that employees are its most valuable assets; and concern for social responsibility, defining SCG’s goal of being a good corporate citizen in communities in which it operates.
Trakulhoon said that all the company’s employees, or SCG people, must commit to the Four Core Values and the concept of ‘talented and ethical’ without compromise. The values cross generational divides and upheld by the company’s executives and staff all over the world. Now matter how innovative the organisation, these four values must be instilled.
SCG’s view is that its continued success relies on these values and that they are a heritage and tradition that form a working culture that propels the company forward and help maintain it as a leader in the ASEAN region.
“For this reason, these principles are communicated to all our employees, leading to a shared sense of purpose for the mutual benefit of all,” explained Trakulhoon.
SCG sees personnel development as a long-term investment that adds value to the organisation, and it holds a wide range of activities that are consistent with its growth strategy.
SCG continuously develops the potential and global skills of employees to prepare them for overseas job assignments. Acknowledging the differences in culture, language, and the business environment, the group looks to see its overseas subsidiaries grow while maintaining their appropriate local conditions.
In order to become an innovative organisation, the group continues to develop its human resources management. Promising new employees with high potential to create new innovations have been recruited while the existing employees have been equipped with knowledge and ability to drive innovations.
Regardless of nationality and countries, SCG considers employees as an integral part of its business that deserves proper care, development, and career opportunities. They are given a chance to take turns to work in different countries as deemed appropriate.
SCG encourages the exchange and sharing of knowledge among employees working regionally to a create network for the benefits of business operations. The group also pledges to improve the quality of life of its employees, both local and expatriates, working overseas to meet the standards of leading companies in order to attract smart and ethical persons to work for the group and create employee loyalty in working for mutual prosperity.
Green code for new buildings
The enforcement of the new Building Energy Efficiency Code from November 15 provides a significant step forward in improving standards and reducing energy consumption for new buildings in Vietnam.
Vietnam has seen booming construction in recent years, mainly concentrated in major cities such as Hanoi, Ho Chi Minh City and Danang, with an ever-growing number of high-rises, shopping centres, hotels and supermarket chains. In these buildings, poor energy efficiency measures have led to huge energy waste and increased operating costs.
A World Bank report reflected Vietnam’s four-fold jump in energy consumption in the decade from 1998 to 2008. This resulted in an average annual 12 per cent hike in carbon dioxide emissions, one of the highest rates worldwide. Promoting energy efficient buildings could help mitigate some of these problems, helping the country meet its greenhouse gas emission targets, which include an 8-10 per cent reduction from 2011 to 2020.
“The building sector is among the biggest energy users in Vietnam, accounting for about 36 per cent of national energy consumption. Improving energy efficiency will help building owners reduce operating costs and contribute towards low-carbon economic growth,” said Wendy Werner, Investment Climate Advisory Services Manager for East Asia and the Pacific at the World Bank Group’s International Finance Corporation (IFC), the largest global development institution focused exclusively on the private sector.
The new code, enacted by the Ministry of Construction (MoC) is viewed by building experts as a marked policy improvement in energy-efficient building management.
The new code was also regarded as more user-friendly. With support from the IFC, the MoC will take further steps to promote its implementation through provision of clear guidelines, capacity building and training for evaluators, professionals and developers. Support and guidance for the construction of model buildings where the specifications from the new code are implemented will also be provided in order to showcase the benefits to investors.
According to Nguyen Cong Thinh, an expert at MoC’s Department of Science and Technology, the new code was an important step in detailing compulsory technical requirements to follow in public and private buildings such as offices, hotels, hospitals, schools, residential and retail buildings with more than 2,500 square metres of total floor space.
Targeting energy efficiency, the new code encompasses concrete technical regulations applicable to building components including building envelopes, interior fixture and fittings such as lighting, air conditioning and ventilation systems, lifts, power consumption and heating.
“The new code features compulsory technical requirements for every individual and organisation responsible for the design, construction and operation of more energy efficient buildings,” Thinh from the MoC underscored.
For new buildings and buildings undergoing upgrades, architectural blueprints will be required to contain details on how the code will be implemented.
“IFC’s baseline survey on Vietnamese building stock shows that application of energy efficient technologies and materials could save around 15- 20 per cent of energy consumption,” Werner said.
IFC through its Green Building and Sustainable Energy Finance programs is providing advisory services to building developers and local financial institutions to spur the uptake of more energy efficient buildings.”
“Although great challenges still lie ahead in executing the new code, it should spur on greater energy efficiency in new buildings,” said Nguyen Minh Thong, executive director at the Vietnam Green Building Council.
Special privileges for importers from SeABank
In a bid to provide utmost comfort to customers especially importers, the Southeast Asia Commercial Joint Stock Bank (SeABank) continues launching various privileges for import enterprises using the bank’s ‘L/C UPAS – Instant goods receipt, deferred payment’ guarantee service’.
L/C UPAS is a deferred payment L/C issued to import enterprises having the need of low-interest-rate loan under L/C method.
This product enables exporters (the beneficiary) to be paid by SeABank immediately and importers (L/C applicant) to make deferred payment and enjoy the numerous benefits including: Interest rate during the deferred payment period equal or lower than USD lending rate, deferred payment period up to 180 days, customers may sell foreign currency to pay for L/C import and enjoying low and flexible deposit rate.
Not only importers are offered with many benefits, their partners are also provided with diverse advantages, such as immediate receipt of payment in stead of providing credit for buyers and waiting until the maturity for payment.
Besides, thanks to instant receipt of payment, exporters can sell goods with lower prices, helping to improve the competitiveness of goods on market.
By offering L/C UPAS product along with an attractive preferential programme, SeABank expects to provide optimal financial solutions to importers wanted low-interest-rate loans.
Interested customers can contact Call Centre 1800 555 587 for free advice.
New law slims chances for shady developers
The revised law on Real Estate Business, currently being drafted, aims to create stricter regulations to reign in unscrupulous developers and strengthen the rights of property buyers.
Under the current regulations, developers can sell future residential properties once they have completed the basement of the building being constructed.
This regulation has led to many developers, constructing the basement level of a project, collecting money from homebuyers, then using the capital for other purposes, such as for setting up other projects. The inevitable consequence is that many of the projects are never completed.
In some extreme cases, developers have sold future residential units before they have even secured a construction licence.
In order to tighten construction management, the draft revised Law on Real Estate Business regulates that in order to sell incomplete units, developers must have both a construction licence and approved project dossiers.
In addition, the revised law also stipulates that developers can only mobilise money from hombuyers when their project has been guaranteed by financial institutions, which will bear all responsibilities in the event that the project is not completed. The additional regulations are intended to create stronger buyers’ rights, which are currently weakly protected.
According to Pham Si Liem, vice chairman of the Vietnam Construction Association, the real estate market presently contains many unscrupulous developers who collect capital without being able to complete the contract. Buyers presently bear the risk in these cases.
“Therefore banks and financial institutions must work closely together to be the agencies linking buyers and developers, to protect both a buyers’ money and a developer’s reputation,” said Liem.
Under the new law, buyers will not pay developers directly, instead they will pay via a financial institution. These institutions will ensure that the buyers’ money is disbursed according to the project’s schedule.
“The new regulations will increase the responsibility of both buyers and developers, to ensure that the project will be finished on time according to the contract,” Liem said.
Meanwhile, lawyer Le Minh Toan said that Circular 11/2013/TT-BXD issued this October, which regulates the steps to report a project’s progress, will also limit the developers ability to delay their projects.
Under the new circular, projects that have been licensed but not implemented after 12 months or fall 24 months behind schedule will be cancelled. The circular also regulates that developers have to report on the progress of their project to the relevant authorities every quarter.
Confidence in Vietnam’s supporting industries on the rise
Vietnam’s biggest supporting industry trade show earlier October lured more visitors than in previous years.
Metalex, Nepcon, Business Alliance for Support Industry in Ho Chi Minh City, and INDEE Vietnam 2013 under the same roof at Saigon Exhibition and Convention Centre in the city October 10-12 welcomed 14,580 visitors, said Duangdej Yuaikwarmdee, deputy managing director of Thai company Reed Tradex, an organiser. Last year’s event received almost 14,000 visitors, a 30 per cent increase on 2011.
Yuaikwarmdee said this year’s exhibitors were happy to meet target customers and distribute their products. He added industrialists at the show were more ready for the coming Asean Economic Community to be effective in 2015.
The event’s second Engineer Master Class in Ho Chi Minh City wrapped up with 558 engineers delighted at new knowledge they could use to improve their business.
Part makers, technology providers, agents and industrial specialists have expanded their networks through the four platforms.
Osamu Morimoto, President of Japan Quality Assurance Organisation, said: “My expectation is that we can enhance the international trade and bilateral collaboration between Japanese and Vietnamese companies through exhibitions like this.”
Gary Yang, director of the exhibition division of Taiwan Association of Machinery Industry, said: “Exhibitions like these are good chances for both Taiwanese companies and Vietnamese consumers because you can find many quality products with high efficiency and competitive prices.”
Adam See, President of Association of Electronic Industries in Singapore, said: “Business relations between Singapore and Vietnam is growing, and this is very important. As the electronics industry in Singapore is quite advanced, we would like to focus on this aspect in this exhibition because it creates a really good opportunity to develop our working relationship with different countries, especially with Vietnam.”
Hoang Thai An, president, Vietnam Electro – Technical Industry Association, said: “Metalex and Nepcon Vietnam 2013 is an important platform for international players to build strategic networks as well as update new technology. Currently, the technologies involved in the automotive and industrial parts keep evolving and changing, Vietnamese manufacturers need to keep themselves updated at all times.”
Pham Ngoc Thang, vice president, Vietnam Automation Association, said: “Metalex 2013 is a good platform for both Vietnamese and regional manufacturers and technology providers to exchange knowledge and acquire the right machinery as well as technologies.”
Kamon Nakasuwan, president, Thai Tool and Die Industry Association, said: “Currently, the profile of the supporting industries in Thailand and Vietnam is different, and Thai companies are not well known in Vietnam yet. By organising our exhibition here, we would like to study the market here more and establish our presence to increase cooperation between companies of the two countries. "
Next year’s Metalex and Nepcon Vietnam will be held on October 9-11, 2014 at the same venue – Saigon Exhibition and Convention Centre in Ho Chi Minh City’s District 7.
Huawei aims to expand mobile handset market share in Vietnam
Huawei, one of the biggest handset providers in the world, also, the world second largest Information and communication technology solution provider, has announced its new strategic direction for the group’s development in Vietnam through the promotion of e-commerce.
For the first time in Vietnam, local consumers will experience mobile shopping entirely online. With the new exciting product, HUAWEI Ascend G700 smartphone, and a unique business strategy, Huawei is looking forward to be a pioneer in integrating e-commerce and technology products segment in Vietnam market.
This November, Huawei will join hand with its local partner Vietnam, Mobile World., JSC, leading retailer of technology products in Vietnam, to launch its new product HUAWEI Ascend G700 smartphone.
Mobile World’s online shopping website (www.thegioididong.com) will be the exclusive distributor of this product and provide support in handling customer transactions, warranty service, technical consultant and product delivery to ensure that Vietnamese consumers will enjoy a quick, convenient and safe online purchase experience with HUAWEI Ascend G700. Also, at the retailer outlets of Mobile World in Hanoi and Ho Chi Minh City, Huawei will also arrange sale booth to serve customers who want to see and test products before purchasing.
"It is time for Vietnam to catch up with the global trend of e-commerce development. Through the use of the online sale channel, businesses can cut out many expenses such as space rental cost, human resources cost, administrative expenses and other costs,” Allen Wang, director of Huawei Vietnam Consumer Business Group said. “As a result, business now can lower production costs and bring more benefits to consumers. With the launch of HUAWEI Ascend G700 on Mobile World website, Huawei hopes that we can help to open the potential door of e-commerce for Vietnam.”
"HUAWEI Ascend G700 is the first smartphone of Huawei to be sold online in Vietnam. As the second largest ICT solutions provider in the world, and a well-known smartphone vendor, we also plan to introduce many more products such as other lines of smartphone, mobile broad band Devices, phone accessories, and possibly terminal product, based on the actual needs of the market. In the next two to three years, Huawei plans to invest over $1 million to expand the e-commerce channel in Vietnam," added Wang.
With latest Android 4.2 (Jelly Bean) operating system installed, 1.2GHz quad-core processor, 5-inch HD touch screen, dual SIM dual Stand and 3G/WLAN wave connection, HUAWEI Ascend G700 is a perfect choice for tech followers, the youth and all other smartphone lovers. Huawei’s very “Emotion IU” interaction feature will satisfy the young users who love to customise home screens, applications, and themes.
Property projects turn active after hiatus
In the housing segment, a slew of projects, old and new alike, have been aggressively offered to homebuyers in recent times, which is a new development after a long hiatus triggered by low consumer demand.
Among the new schemes, the Phuc Yen 2 apartment project in Tan Binh District has been introduced to customers through marketing agency Hung Thinh Land at the starting price of VND15.3 million per square meter for condos measuring 79-106 square meters a unit.
Meanwhile, Chuong Duong Investment Joint Stock Co. has renewed the apartment Tan Huong Tower with 360 condo units in Tan Phu District, which are quoted at VND13.5 million a square meter on the real estate exchange of Hung Thinh Land, down 10% from the earlier announced level.
Dat Xanh Group in late August started construction of a residential and commercial complex called Sunview Town in Thu Duc District. The scheme costs an estimated VND1.3 trillion and has around 1,600 units priced at VND10.9 million a square meter or above.
However, many shopping centers, office buildings and hotels in the downtown area have been moving at a slow pace since these segments are still mired in the doldrums.
In particular, the Saigon One Tower complex covering 40,000 square meters and the Le Meridien Saigon at a 9,100 square meter location, both on Ton Duc Thang Street in District 1, have been constructed but have not come into operation.
Several complex buildings in the heart of the city have made little or no headway such as the Lavenue Crown on Le Duan Boulevard and the SJC Tower on Le Loi Boulevard. Given a limited source of new supply, the existing projects stand a better chance of being full.
La Poste Group strikes deal to assist LienVietPostBank
France’s La Poste Group last week signed a technical consulting and technology transfer contract with Vietnam Post Corporation (VNPost) and LienVietPostBank in which VNPost is a shareholder.
La Poste will provide consulting for VNPost and LienVietPostBank to work on the merger of effective administration models, design of retail products for a post bank and the launch of new products onto the market. The French firm will also help LienVietPostBank build up a model post transaction office in five years.
La Poste Group will send its experts to work with a team of LienVietPostBank on the project.
Duong Cong Minh, chairman of LienVietPostBank, said the bank has over 10,000 service points thanks to a pervasive network of post offices.
LienVietPostBank has total chartered capital of nearly VND6.5 trillion and total assets of nearly VND80 trillion. The bank has nearly one million customers.
LVI to compensate Lao Airlines plane crash victims
LVI, an insurance joint venture between BIDV Insurance Company (BIC) and Lao Bank for Foreign Trade, will pay compensation for the insurance claims of the Lao Airlines aircraft crash victims and their families, but at different rates.
LVI said they were working with international air transport evaluation agencies and lawyers to determine levels of compensation for the ATR72 turbo-prop plane which plunged into the Mekong river in southern Laos on October 16 and the 49 people on board, among them nationals of 10 countries with five Vietnamese, killed in the crash.
A senior source from BIC told the Daily on Sunday by phone that Lao Airlines had chosen LVI as an insurer.
The ill-fated twin-engine plane, coded QV301, was brand-new when it was put into service in March this year. It was insured by LVI.
LVI leaders and staff came to the crash scene in Pakse to coordinate with local authorities to work with the airline, the re-insurer and the crash evaluation agency over compensation for damages and losses of lives.
The BIC source said, “Lao Airlines and local authorities are focusing on searching for the bodies of the victims, bringing the victims’ family members to the crash site and helping with the burials of the deceased.
“The plane will be certainly 100% compensated but compensating for the insurance claims by the third party and the killed passengers will be hard. There are different insurance terms and conditions for different passengers because it depends on the terms and conditions of insurance stated in the air tickets and the policies held by the passengers in their countries.”
What is more, this was a domestic flight but most of the passengers were foreigners, so LVI is finding it tough to settle the different insurance claims that are based on the different insurance policies in their countries.
The different compensation levels will be decided by the evaluation agency and lawyers.
Municipal bond market heats up
Local authorities in recent times have sped up municipal bond issuance, spurring up transactions on the bond market to its highest level over the past five years.
Hanoi City’s government has sold VND1 trillion worth of three-year municipal bonds with a coupon of 8.7% per annum, raising funds for investment in eight important infrastructure projects, namely five traffic projects, two hospitals in outlying areas and a project in the agriculture and rural development sector.
On September 31, Quang Ninh Province issued VND800 billion worth of three-year bonds at the fixed coupon of 8.75% per annum. Interest will be paid annually while the bonds will be tradable on the open market or in discount, refinancing and rediscount transactions given approval of the central bank.
Meanwhile, HCMC will launch the second bond sale of this year on October 23 with a total value of VND1.98 trillion. The bonds will carry various terms of three, five and 10 years. The city aims to sell VND3 trillion worth of bonds this year.
According to some financial organizations, other localities such as Vinh Phuc, Bac Ninh, Danang and Can Tho also have plans to issue municipal bonds.
The municipal bond market has never been so busy over the past five years thanks to large issuance of municipal bonds and bonds of credit institutions, large enterprises and State-owned corporations.
According to the director of an investment fund, as interest rates have fallen over the last few years, organizations have a good chance to mobilize medium and long-term capital. Both lending and mobilization rates of banks are expected to remain stable from now until the year-end.
In addition, government bond yields have declined slightly and are expected to be stable because the State Treasury keeps selling government bonds to improve the State budget and meet the target allocated by the Ministry of Finance. Municipal bonds have higher coupons than government bonds while the products can help organizations diversify their portfolios.
Vietnam Bond Market Association general secretary Do Ngoc Quynh said that coupons are giving strength to the bond market. On the inter-bank market, dong interest rates of overnight to four-week terms have declined by three to five percentage points against the previous month and are expected to drop further by the end of the year.
Banks have also improved liquidity. Besides, to meet credit growth targets, banks are forced to extend more loans. Therefore, among safe and profitable investment channels, bonds remain the first choice for investors, Quynh said.
SHTP gets more research, training projects
Though foreign and local investments in Saigon Hi-Tech Park (SHTP) in January-September declined year-on-year, a major proportion of the capital pledged in the period went to research, incubation and training projects.
According to the SHTP authority, SHTP attracted five new hi-tech projects worth US$120 million in the period, down over 23% year-on-year. However, the investment projects involving high technology research and high-quality human resource development accounted for 40% of total pledged capital.
Some of the new hi-tech projects licensed into SHTP are a semiconductor production center of Microchip, a facility of the HUTECH Hi-tech Institute and FPT’s research and training center.
Such an investment trend will help SHTP realize its strategy of becoming a leading hi-tech park and a strong research and development center of the region, according to the SHTP authority.
From now towards the year-end, SHTP expects to get more research and development, training and technology incubation projects.
Regarding supporting industries and high technology, SHTP has set aside a section for enterprises active in these sectors to create a domestic supply chain helpful for foreign investors to increase their competitiveness.
With all these orientations in place, the authority looks to increase the export turnover of hi-tech products six times by 2015 compared to 2010.
SHTP now has 58 valid projects with total registered capital of over US$2.1 billion. Of these, 29 projects worth US$357 million belong to local investors and 29 projects capitalized at over US$1.74 billion involve foreign investors.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR